China’s Singles’ Day 2021: Three Questions Answered

If you were curious about China’s economy and consumer behavior, Singles’ Day—not just the number one shopping day in China, but the number one in the world—offers a few answers. China can, again, boast strong sales numbers for this November 11 shopping holiday.

The headline numbers: Alibaba reached some $84.5 billion in GMV, and although that figure was up 8.4% over last year’s, it marked the slowest pace of growth since the event began in 2009. JD reported sales of $54.7 billion in GMV, up 28.6% over 2020. (GMV is Gross Merchandise Volume, the standard metric in e-commerce, calculated by gross sales without subtracting discounts or returns.)

It’s worth noting that although Singles’ Day takes place on one day, China’s e-commerce platforms kicked off the event with pre-sales that began on October 20 this year.

I rate this GMV as PDI, or pretty darn impressive, with all sorts of good news on the platforms. And the news is even better when you consider the context.

First, the platform news. Both Alibaba and JD are responding to Xi Jinping’s call for a “common prosperity” and emphasizing quality of life issues. Each platform made a push for the green market, with Alibaba launching a dedicated eco-friendly vertical channel on Tmall that hosted over 500,000 products with official Green Product Certification from over 2,000 merchants. For its part, JD touted its reduction in carbon emissions. Historically, Singles’ Day had been more about glamour; today it is social concerns that are front and center.

Beyond green themes, the other development was the continued success and growth of livestreaming.  I had the chance to run up to New York and look at the Diane Von Fursternberg 11.11 livestream (courtesy of Alibaba) and I was impressed by their efforts. DVF was able to hit the right balance of making their apparel accessible in a livestream setting while still retaining their premium position.

Second, the off-platform news. To my mind, this is what makes the 11.11 results so impressive. China, like the U.S. and other countries, is still grappling with the disruption of the pandemic. There is also greater economic uncertainty and more supply chain disruption in China than at any time in recent years. It would not be surprising if consumers responded with a slowdown in activity.

Meanwhile, Chinese regulators have also been cracking down on tech companies deemed to be using monopolistic practices such as “er xuan yi,” which means choose one out of two, a policy that forced merchants to sell their products on just one platform.

So here are the three big questions that were answered—for now—by Singles’ Day:

— Is China’s growth over? No, although the rate of growth is down from its peak. China’s economy grew at 4.9% in the third quarter from a year ago.

— Do China’s consumers have diminished confidence or purchasing power? No, there is a high degree of consumer resilience even with some economic uncertainty. China’s statistics bureau said the country’s retail sales rose 16.4% year on year in the first three quarters of 2021.

— Do U.S. products suffer from trade friction or bilateral tensions? No, there have been no calls for boycotts of U.S. goods or ugly displays of nationalism in consumer behavior.

Singles’ Day was a reaffirmation of the promise of China e-commerce. Chinese consumers are hungry for what the world has to offer. The external environment, be it economic or political turmoil, does not drive consumer behavior.